Google is reportedly just weeks away from announcing a free music service in China with the help of Top100.cn. The move helps Google compete with China's top search engine Biadu who allows searches of pirated downloads that Google blocks.
Beijing based Top100.cn already has deals with Universal Music and a hundred other foreign and domestic labels to sell licensed downloads for 1 yuan (14 cents). Now working with Google, they will offer free watermarked mp3's paired with value added services like links to concert dates and ringtones.
It has been estimated that more than 90% of Chinese music consumption is pirated. Local labels survive via their own brand of 360 deals including live performances and sponsors. Some download revenue (via an undisclosed royalty agreement) seems better than none and labels also benefit from collected demographic information. Sony BMG and EMI are in talks with the new venture and WMG has expressed interest according to the Wall Street Journal
IS THIS THE FUTURE OF THE MUSIC INDUSTRY?
Low priced paid downloads. Free music to draw traffic. Sponsor supported downloads. Value-added content. Demographics gathered to monetize the music in other ways. 360 deals.
These have all been floated as solutions to the music industry's decline. Could Google operating in one of the most pirated marketplaces in the world be showing the world's music industry a possible path forward?
At the very least, this an experiment worth watching. But it just might be much more than that.